Question

Sheridan Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,400,000 shares of $10 par common stock. At no time has Sheridan issued any potentially dilutive securities. Listed below is a summary of Sheridan’s common stock activities.

1.		Number of common shares issued and outstanding at December 31, 2018		2,050,000
2.		Shares issued as a result of a 10% stock dividend on September 30, 2019		205,000
3.		Shares issued for cash on March 31, 2020		1,810,000
		Number of common shares issued and outstanding at December 31, 2020		4,065,000
4.		A 2-for-1 stock split of Sheridan’s common stock took place on March 31, 2021

(b)

Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.

______________shares

Answer 1

Question is not yet clear for me but I will answer even though I will explain it clearly and u can place the number above u get it number of shares

Here dividend given is 'x'(Number not clear for me) is 10% for 100% =X*100/10 we will get number of shares issued then that value be y(u can calculate the value) for 9 months =Y*9/12 you will get 9 months shares then we have to find out 3 months share

X+Y=total shares if you can get 3 months share just multiply with 3 and divided by 12 u can get 3 months share

By this we get 12 months share i.e X+Y

And stock split is irrelevant for calculating shares as on dec31